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World Economic and Financial Surveys

World Economic Outlook (WEO)

Growth Resuming, Dangers Remain

April 2012

Corrections as of August 15, 2012

The April 2012 edition of the World Economic Outlook assesses the prospects for the global economy, which has gradually strengthened after a major setback during 2011. The threat of a sharp global slowdown eased with improved activity in the United States and better policies in the euro area. Weak recovery will likely resume in the major advanced economies, and activity will remain relatively solid in most emerging and developing economies. However, recent improvements are very fragile. Policymakers must calibrate policies to support growth in the near term and must implement fundamental changes to achieve healthy growth in the medium term. Chapter 3 examines how policies directed at real estate markets can accelerate the improvement of household balance sheets and thus support otherwise anemic consumption. Chapter 4 examines how swings in commodity prices affect commodity exporting economies, many of which have experienced a decade of good growth. With commodity prices unlikely to continue growing at the recent elevated pace, however, these economies may have to adapt their fiscal and other policies to lower potential output growth in the future.



Contents

Chapter 1: Global Prospects and Policies

Boxes
Chart Data 1.1 The Labor Share in Europe and the United States during and after the Great Recession
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1.2 The Global Recovery: Where Do We Stand?
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1.3 Where Is China’s External Surplus Headed?
Tables
1.1 Overview of the World Economic Outlook Projections
1.SF.1. Share of Commodity Price Variance Associated with Static Common Factors
1.SF.2. Global Oil Demand and Production by Region
1.SF.3. Mean and Standard Deviations of Oil Production
Figures
Chart Data 1.1 Global Indicators
Chart Data 1.2 Recent Financial Market Developments
Chart Data 1.3 Current and Forward-Looking Growth Indicators
Chart Data 1.4 Emerging Market Conditions
Chart Data 1.5 Credit Market Conditions
Chart Data 1.6 Euro Area Spillovers
Chart Data 1.7 Monetary and Fiscal Policies
Chart Data 1.8 Balance Sheets and Saving Rates
Chart Data 1.9 Global Inflation
Chart Data 1.10 Emerging Market Economies
Chart Data 1.11 Global Imbalances
Chart Data 1.12 Risks to the Global Outlook
Chart Data 1.13 Recession and Deflation Risks
Chart Data 1.14 WEO Downside Scenario for Increased Bank and Sovereign Stress in the Euro Area
Chart Data 1.15 WEO Downside Scenario for Disruption to the Global Oil Supply
Chart Data 1.16 WEO Downside Scenario for Reevaluation of Potential Output Growth in Emerging Market Economies
Chart Data 1.17 WEO Upside Scenario
Chart   1.18 Overheating Indicators for the G20 Countries
Chart Data 1.19 Policy Requirements in Emerging Market Economies
Chart Data 1.SF.1. Commodity Prices and the Global Economy
Chart Data 1.SF.2. China: Recent Commodity Market Developments
Chart Data 1.SF.3. Commodity Supply and Inventory Developments I
Chart Data 1.SF.4. Commodity Supply and Inventory Developments II

Chapter 2: Country and Regional Perspectives

Boxes
Chart Data 2.1 East-West Linkages and Spillovers in Europe
Tables
2.1 Selected European Economies: Real GDP, Consumer Prices, Current Account Balance, and Unemployment
2.2 Selected Advanced Economies: Real GDP, Consumer Prices, Current Account Balance, and Unemployment
2.3 Selected Asian Economies: Real GDP, Consumer Prices, Current Account Balance, and Unemployment
2.4 Selected Western Hemisphere Economies: Real GDP, Consumer Prices, Current Account Balance, and Unemployment
2.5 Commonwealth of Independent States: Real GDP, Consumer Prices, Current Account Balance, and Unemployment
2.6 Selected Middle East and North African Economies: Real GDP, Consumer Prices, Current Account Balance, and Unemployment
2.7 Selected Sub-Saharan African Economies: Real GDP, Consumer Prices, Current Account Balance, and Unemployment
Figures
Chart Data 2.1 Revisions to the 2012 WEO Growth Projections and Trade Linkages with Europe
Chart Data 2.2 The Effects of an Intensified Euro Area Crisis on Various Regions
Chart Data 2.3 Europe: Revisions to the 2012 WEO Growth Forecasts
Chart Data 2.4 Europe: Back in Recession
Chart Data 2.5 Trade and Financial Linkages with the Euro Area
Chart Data 2.6 United States and Canada: Revisions to 2012 GDP Growth Forecasts
Chart Data 2.7 United States: Pulling Itself Up by Its Bootstraps
Chart Data 2.8 Asia: Revisions to 2012 GDP Growth Forecasts
Chart Data 2.9 Asia: Growth Is Moderating
Chart Data 2.10 Latin America and the Caribbean: Revisions to 2012 GDP Growth Forecasts
Chart Data 2.11 Latin America: Watch Out for Downdrafts
Chart Data 2.12 Commonwealth of Independent States: Revisions to 2012 GDP Growth Forecasts
Chart Data 2.13 Commonwealth of Independent States: Buoyed by Commodity Prices, Buffeted by Euro Area Headwinds
Chart Data 2.14 Middle East and North Africa: Revisions to 2012 GDP Growth Forecasts
Chart Data 2.15 Middle East and North Africa: A Sea of Troubles
Chart Data 2.16 Sub-Saharan Africa: Revisions to 2012 GDP Growth Forecasts
Chart Data 2.17 Sub-Saharan Africa: Continued Resilience
Chart Data 2.SF.1 Euro Area Bank Participation in Global Lending, September 2011
Chart Data 2.SF.2 Regional Exposure to Banks’ Foreign Claims
Chart Data 2.SF.3 Regional Vulnerabilities
Chart Data 2.SF.4 Evolution of Banks’ Foreign Claims over Time
Chart Data 2.SF.5 Potential Impact of Euro Area Bank Deleveraging on Growth

Chapter 3: Dealing with Household Debt

Boxes
3.1 The U.S. Home Owners' Loan Corporation
3.2 Household Debt Restructuring in Iceland
Tables
3.1 Government-Supported Out-of-Court Debt Restructuring Programs in Selected Case Study Countries
3.2 Real Consumption following Housing Busts: Robustness
Figures
Chart Data 3.1 Household Debt, House Prices, and Nonperforming Mortgage Loans, 2002–10
Chart Data 3.2 The Great Recession: Consumption Loss versus Precrisis Rise in Household Debt
Chart Data 3.3 Economic Activity during Housing Busts
Chart Data 3.4 Housing Wealth and Household Consumption
Chart Data 3.5 Household Debt during Housing Busts
Chart Data 3.6 Household Consumption
Chart Data 3.7 Economic Activity during the Great Recession in the United States
Chart Data 3.8 Estimated House Price Misalignment in the United States
Chart Data 3.9 Foreclosures and Household Debt during the Great Depression in the United States
Chart Data 3.10 Household Balance Sheets during the Great Recession in Iceland
Chart Data 3.11 The U.S. Housing Market, 2000–11
Chart Data 3.12 Government Debt in the Scandinavian Countries, 1988–95

Chapter 4: Commodity Price Swings and Commodity Exporters

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4.1 Macroeconomic Effects of Commodity Price Shocks on Low-Income Countries
    4.2 Volatile Commodity Prices and the Development Challenge in Low-Income Countries
Tables
4.1 Average Economic Performance of Net Commodity Exporters, 1970–2010
4.2 Economic Performance of Net Commodity Exporters during the 2000s
4.3 Relationship between Commodity Price Swings and Banking Crises in Commodity Exporters
4.4 Dynamic Effects of Global Commodity Market Shocks
4.5 Domestic Macroeconomic Effects of Global Commodity Market Shocks
4.6 Comparison of Policy Instruments for Permanent Increases in Oil Royalties
4.7 Commodity Intensity in Exports
4.8 Statistical Properties of Real Commodity Prices
Figures
Chart Data 4.1 World Commodity Prices, 1970–2011
Chart Data 4.2 Share of Net Commodity Exports in Total Exports and GDP
Chart Data 4.3 Macroeconomic Performance of Commodity Exporters during Commodity Price Swings
Chart Data 4.4 Macroeconomic Performance of Exporters of Four Major Commodities during Commodity Price Swings
Chart Data 4.5 The Exchange Rate Regime and Exporter Performance during Commodity Price Swings
Chart Data 4.6 Capital Account Openness and Exporter Performance during Commodity Price Swings
Chart Data 4.7 Real Output Effects of Commodity Market Shocks
Chart Data 4.8 Oil Price Drivers, Cycles, and Performance in Net Oil Exporters
Chart Data 4.9 Dynamic Effects of a Temporary Reduction in Oil Supply in the Rest of the World on a Small, Open Oil Exporter
Chart Data 4.10 Dynamic Effects of a Temporary Increase in Liquidity in the Rest of the World on a Small, Open Oil Exporter
Chart Data 4.11 Optimal Fiscal Policy Stance under Alternative Policy Frameworks and Structural Characteristics
Chart Data 4.12 Duration of Commodity Price Upswings and Downswings
Chart Data 4.13 Amplitude of Commodity Price Upswings and Downswings
Chart Data 4.14 Correlation of Global Real GDP Growth and Real Oil Price Forecast Errors

Statistical Appendix

Text (Download PDF)
Assumptions
What's New
Data and Conventions
Classification of Countries
General Features and Composition of Groups in the World Economic Outlook Classification
Table A. Classification by World Economic Outlook Groups and Their Shares in Aggregate GDP, Exports of Goods and Services, and Population, 2011
Table B. Advanced Economies by Subgroup
Table C. European Union
Table D. Emerging and Developing Economies by Region and Main Source of Export Earnings
Table E. Emerging and Developing Economies by Region, Net External Position, and Status as Heavily Indebted Poor Countries
Box A1. Economic Policy Assumptions Underlying the Projections for Selected Economies
 
List of Tables Part A (Download PDF)
Output (Tables A1–A4)
Inflation (Tables A5–A7)
Financial Policies (Table A8)
Foreign Trade (Table A9)
Current Account Transactions (Tables A10–A12)
Balance of Payments and External Financing (Tables A13–A14)
Flow of Funds (Table A15)
Medium–Term Baseline Scenario (Table A16)
 
List of Tables Part B (Download PDF - available on the web only)
Output (Tables B1–B2)
Inflation (Tables B3–B4)
Financial Policies (Tables B5–B10)
Foreign Trade (Tables B11–B13)
Current Account Transactions (Tables B14–B17)
Balance of Payments and External Financing (Tables B18–B20)
External Debt and Debt Service (Tables B21–B26)
Medium-Term Baseline Scenario (Table B27)